KRONOS WORLDWIDE, INC. REPORTS SECOND QUARTER 2024 RESULTS
Kronos Worldwide (NYSE:KRO) reported net income of $19.5 million ($0.17 per share) in Q2 2024, compared to a net loss of $8.2 million in Q2 2023. Net sales increased 13% to $500.5 million in Q2 2024. The improvement was driven by higher sales volumes (+29%) and production volumes (+54%), partially offset by lower average TiO2 selling prices (-8%). The company's TiO2 segment profit was $41.1 million in Q2 2024, up from a loss of $2.3 million in Q2 2023. Kronos also acquired the remaining 50% stake in Louisiana Pigment Company for $185 million upfront and a potential $15 million earn-out. The acquisition was financed through a $132 million borrowing and cash on hand. The company expects this move to strengthen its competitive position and generate significant synergies.
Kronos Worldwide (NYSE:KRO) ha riportato un utile netto di 19,5 milioni di dollari (0,17 dollari per azione) nel secondo trimestre del 2024, rispetto a una perdita netta di 8,2 milioni di dollari nello stesso periodo del 2023. Le vendite nette sono aumentate del 13% arrivando a 500,5 milioni di dollari nel secondo trimestre del 2024. Questo miglioramento è stato guidato da un aumento dei volumi di vendita (+29%) e dei volumi di produzione (+54%), parzialmente compensato da un calo dei prezzi medi di vendita del TiO2 (-8%). Il profitto del segmento TiO2 dell'azienda è stato di 41,1 milioni di dollari nel secondo trimestre del 2024, in aumento rispetto a una perdita di 2,3 milioni di dollari nello stesso periodo del 2023. Kronos ha anche acquisito la restante partecipazione del 50% nella Louisiana Pigment Company per 185 milioni di dollari in anticipo e un potenziale earn-out di 15 milioni di dollari. L'acquisizione è stata finanziata attraverso un prestito di 132 milioni di dollari e liquidità disponibile. L'azienda prevede che questa mossa rafforzi la sua posizione competitiva e generi sinergie significative.
Kronos Worldwide (NYSE:KRO) reportó un ingreso neto de 19,5 millones de dólares (0,17 dólares por acción) en el segundo trimestre de 2024, en comparación con una pérdida neta de 8,2 millones de dólares en el segundo trimestre de 2023. Las ventas netas aumentaron un 13% hasta 500,5 millones de dólares en el segundo trimestre de 2024. La mejora fue impulsada por volúmenes de ventas más altos (+29%) y volúmenes de producción (+54%), parcialmente compensados por precios de venta promedio de TiO2 más bajos (-8%). El beneficio del segmento de TiO2 de la empresa fue de 41,1 millones de dólares en el segundo trimestre de 2024, frente a una pérdida de 2,3 millones de dólares en el segundo trimestre de 2023. Kronos también adquirió la participación restante del 50% en Louisiana Pigment Company por 185 millones de dólares por adelantado y un potencial earn-out de 15 millones de dólares. La adquisición fue financiada a través de un préstamo de 132 millones de dólares y efectivo disponible. La compañía espera que este movimiento fortalezca su posición competitiva y genere sinergias significativas.
Kronos Worldwide (NYSE:KRO)는 2024년 2분기에 1950만 달러의 순이익 (주당 0.17 달러)을 보고했으며, 이는 2023년 2분기에 820만 달러의 순손실을 기록한 것과 대비됩니다. 순매출은 13% 증가하여 5억 5백만 달러에 달했습니다. 이 개선은 판매량(+29%) 및 생산량(+54%) 증가에 의해 주도되었으나, 평균 TiO2 판매가격의 감소(-8%)로 인해 부분적으로 상쇄되었습니다. 회사의 TiO2 부문 이익은 2024년 2분기에 4110만 달러로, 2023년 2분기에 230만 달러의 손실에서 상승했습니다. Kronos는 또한 루이지애나 색소 회사의 남은 50% 지분을 1억 8500만 달러에 즉시 인수하고, 1500만 달러의 추가 보너스가 포함됩니다. 이번 인수는 1억 3200만 달러의 차입금과 현금으로 자금 조달되었습니다. 회사는 이번 조치가 경쟁력을 강화하고 추가적인 시너지를 창출할 것으로 기대하고 있습니다.
Kronos Worldwide (NYSE:KRO) a enregistré un revenu net de 19,5 millions de dollars (0,17 dollar par action) au 2ème trimestre 2024, contre une perte nette de 8,2 millions de dollars au 2ème trimestre 2023. Les ventes nettes ont augmenté de 13% pour atteindre 500,5 millions de dollars au 2ème trimestre 2024. Cette amélioration a été soutenue par une augmentation des volumes de ventes (+29%) et des volumes de production (+54%), partiellement compensée par une baisse des prix de vente moyens du TiO2 (-8%). Le bénéfice du segment TiO2 de l'entreprise s'élevait à 41,1 millions de dollars au 2ème trimestre 2024, contre une perte de 2,3 millions de dollars au 2ème trimestre 2023. Kronos a également acquis les 50% restants dans Louisiana Pigment Company pour 185 millions de dollars d'avance et un potentiel de 15 millions de dollars en earn-out. Cette acquisition a été financée par un emprunt de 132 millions de dollars et des liquidités disponibles. L'entreprise s'attend à ce que ce mouvement renforce sa position concurrentielle et génère des synergies significatives.
Kronos Worldwide (NYSE:KRO) meldete einen Nettoertrag von 19,5 Millionen Dollar (0,17 Dollar pro Aktie) im 2. Quartal 2024, im Vergleich zu einem Nettoverlust von 8,2 Millionen Dollar im 2. Quartal 2023. Die Nettoumsätze stiegen um 13% auf 500,5 Millionen Dollar im 2. Quartal 2024. Die Verbesserung war bedingt durch höhere Verkaufsvolumina (+29%) und Produktionsvolumina (+54%), teilweise ausgeglichen durch niedrigere durchschnittliche TiO2-Verkaufspreise (-8%). Der Gewinn des TiO2-Segments des Unternehmens betrug im 2. Quartal 2024 41,1 Millionen Dollar, ein Anstieg von einem Verlust von 2,3 Millionen Dollar im 2. Quartal 2023. Kronos hat auch die verbleibenden 50% der Anteile an Louisiana Pigment Company für 185 Millionen Dollar im Voraus und eine mögliche Earn-out von 15 Millionen Dollar erworben. Die Akquisition wurde über einen Kredit in Höhe von 132 Millionen Dollar und Bargeld finanziert. Das Unternehmen erwartet, dass dieser Schritt seine Wettbewerbsposition stärkt und signifikante Synergien schafft.
- Net income improved from a loss of $8.2 million in Q2 2023 to a profit of $19.5 million in Q2 2024
- Net sales increased by 13% year-over-year to $500.5 million in Q2 2024
- TiO2 sales volumes increased by 29% in Q2 2024 compared to Q2 2023
- TiO2 production volumes were 54% higher in Q2 2024 compared to Q2 2023
- TiO2 segment profit improved from a loss of $2.3 million in Q2 2023 to a profit of $41.1 million in Q2 2024
- Acquisition of remaining 50% stake in Louisiana Pigment Company expected to strengthen competitive position and generate synergies
- Average TiO2 selling prices were 8% lower in Q2 2024 compared to Q2 2023
- Quarterly dividend reduced to $0.05 per share to manage increased debt service costs and working capital needs
- Incurred a $2 million charge related to workforce reductions
- Recorded $10 million in non-cash charges primarily related to accelerated depreciation for closure of sulfate process line in Canada
Insights
Kronos Worldwide's Q2 2024 results show a significant turnaround, with net income of
The acquisition of the remaining
The TiO2 market shows signs of recovery, with Kronos reporting strengthening demand across all major markets. This uptick resulted in a
However, the 9% decrease in average selling prices for H1 2024 indicates ongoing pricing pressures in the industry. The acquisition of full control over LPC positions Kronos to potentially influence pricing dynamics in the North American market. The company's focus on increasing production capacity and efficiency at LPC could lead to a stronger competitive position, potentially impacting industry supply-demand balance in the medium term.
Kronos' operational improvements are evident in their Q2 2024 results. The increase in production volumes by
The closure of the sulfate process line in Canada, resulting in
Dallas, TX, Aug. 07, 2024 (GLOBE NEWSWIRE) -- Kronos Worldwide, Inc. (NYSE:KRO) today reported net income of
Net sales of
Our TiO2 segment profit (see description of non-GAAP information below) in the second quarter of 2024 was
Our net income (loss) before interest expense, income taxes and depreciation and amortization expense (EBITDA) (see description of non-GAAP information below) in the second quarter of 2024 was
Our income from operations in the first six months of 2024 includes an aggregate charge related to a write-off of deferred financing costs of
Our loss from operations in the first six months of 2023 includes an insurance settlement gain related to a 2020 business interruption insurance claim of
As previously reported, effective July 16, 2024, we acquired the
We constructed LPC in 1992 using our technology and LPC is the newest TiO2 plant operating in the Western world. Regaining full control of LPC represents a substantial investment in the growth of our TiO2 business and strengthens our competitive footprint by increasing our capacity in the strategically important North American marketplace and enabling us to expand our product offerings to better serve our customers. In addition, we expect this acquisition will result in significant synergies including logistical cost optimization between our North American facilities and other commercial and overhead efficiencies. The LPC acquisition provides us the opportunity to implement process innovations using proven technology utilized at our other manufacturing facilities to increase LPC’s current estimated annual production capacity of 156,000 metric tons and improve efficiency and product quality. Beginning in the third quarter of 2024, we lowered our quarterly dividend to $.05 per share. The reduction of the dividend will give us added flexibility to absorb increased debt service costs, manage working capital needs, reduce leverage and support strategic capital investment opportunities.
Simultaneous with the acquisition of LPC and to support our general liquidity needs, we completed an amendment to the Global Revolver. Among other things, the amendment increases the maximum borrowing amount from
The statements in this release relating to matters that are not historical facts are forward-looking statements that represent management's beliefs and assumptions based on currently available information. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will prove to be correct. Such statements by their nature involve substantial risks and uncertainties that could significantly impact expected results, and actual future results could differ materially from those described in such forward-looking statements. While it is not possible to identify all factors, we continue to face many risks and uncertainties. The factors that could cause actual future results to differ materially include, but are not limited to, the following:
- Future supply and demand for our products;
- Our ability to realize expected cost savings from strategic and operational initiatives;
- Our ability to integrate acquisitions, including LPC into our operations and realize expected synergies and innovations;
- The extent of the dependence of certain of our businesses on certain market sectors;
- The cyclicality of our business;
- Customer and producer inventory levels;
- Unexpected or earlier-than-expected industry capacity expansion;
- Changes in raw material and other operating costs (such as energy and ore costs);
- Changes in the availability of raw materials (such as ore);
- General global economic and political conditions that harm the worldwide economy, disrupt our supply chain, increase material and energy costs or reduce demand or perceived demand for our TiO2 products or impair our ability to operate our facilities (including changes in the level of gross domestic product in various regions of the world, natural disasters, terrorist acts, global conflicts and public health crises);
- Operating interruptions (including, but not limited to, labor disputes, leaks, natural disasters, fires, explosions, unscheduled or unplanned downtime, transportation interruptions, certain regional and world events or economic conditions and public health crises);
- Technology related disruptions (including, but not limited to, cyber-attacks; software implementation, upgrades or improvements; technology processing failures; or other events) related to our technology infrastructure that could impact our ability to continue operations, or at key vendors which could impact our supply chain, or at key customers which could impact their operations and cause them to curtail or pause orders;
- Competitive products and substitute products;
- Customer and competitor strategies;
- Potential consolidation of our competitors;
- Potential consolidation of our customers;
- The impact of pricing and production decisions;
- Competitive technology positions;
- Potential difficulties in upgrading or implementing accounting and manufacturing software systems;
- The introduction of trade barriers or trade disputes;
- Fluctuations in currency exchange rates (such as changes in the exchange rate between the U.S. dollar and each of the euro, the Norwegian krone and the Canadian dollar and between the euro and the Norwegian krone), or possible disruptions to our business resulting from uncertainties associated with the euro or other currencies;
- Our ability to renew or refinance credit facilities or other debt instruments in the future;
- Changes in interest rates;
- Our ability to maintain sufficient liquidity;
- The ultimate outcome of income tax audits, tax settlement initiatives or other tax matters, including future tax reform;
- Our ability to utilize income tax attributes, the benefits of which may or may not have been recognized under the more-likely-than-not recognition criteria;
- Environmental matters (such as those requiring compliance with emission and discharge standards for existing and new facilities);
- Government laws and regulations and possible changes therein including new environmental, health and safety, sustainability or other regulations (such as those seeking to limit or classify TiO2 or its use); and
- Pending or possible future litigation or other actions.
Should one or more of these risks materialize (or the consequences of such a development worsen), or should the underlying assumptions prove incorrect, actual results could differ materially from those forecasted or expected. The Company disclaims any intention or obligation to update or revise any forward-looking statement whether as a result of changes in information, future events or otherwise.
In an effort to provide investors with additional information regarding the Company's results of operations as determined by accounting principles generally accepted in the United States of America (GAAP), the Company has disclosed certain non-GAAP information which the Company believes provides useful information to investors:
- The Company discloses segment profit, which is used by the Company’s management to assess the performance of the Company’s TiO2 operations. The Company believes disclosure of segment profit provides useful information to investors because it allows investors to analyze the performance of the Company’s TiO2 operations in the same way that the Company’s management assesses performance. The Company defines segment profit as net income before income tax expense and certain general corporate items. These general corporate items include corporate expense and the components of other income (expense) except for trade interest income; and
- The Company discloses EBITDA, which is also used by the Company’s management to assess the performance of the Company’s TiO2 operations. The Company believes disclosure of EBITDA provides useful information to investors because it allows investors to analyze the performance of the Company’s TiO2 operations in the same way that the Company’s management assesses performance. The Company defines EBITDA as net income before interest expense, income taxes and depreciation and amortization expense.
Kronos Worldwide, Inc. is a major international producer of titanium dioxide products.
Investor Relations Contact:
Bryan A. Hanley
Senior Vice President & Treasurer
Tel: (972) 233-1700
KRONOS WORLDWIDE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share and metric ton data)
| Three months ended | Six months ended | |||||||||||
| June 30, | June 30, | |||||||||||
| 2023 | 2024 | 2023 | 2024 | |||||||||
| (unaudited) | ||||||||||||
| Net sales | $ | 443.2 | $ | 500.5 | $ | 869.5 | $ | 979.3 | ||||
| Cost of sales | 399.1 | 400.3 | 794.6 | 807.6 | ||||||||
| Gross margin | 44.1 | 100.2 | 74.9 | 171.7 | ||||||||
| Selling, general and administrative expense | 50.1 | 57.9 | 103.3 | 112.1 | ||||||||
| Other operating income (expense): | ||||||||||||
| Currency transactions, net | 3.1 | (3.8) | 8.5 | 2.0 | ||||||||
| Other income, net | .2 | 1.1 | 2.1 | 1.0 | ||||||||
| Corporate expense | (4.0) | (3.7) | (7.2) | (7.2) | ||||||||
| Income (loss) from operations | (6.7) | 35.9 | (25.0) | 55.4 | ||||||||
| Other income (expense): | ||||||||||||
| Trade interest income | .4 | 1.5 | .7 | 1.9 | ||||||||
| Other interest and dividend income | 1.1 | .6 | 2.8 | 1.5 | ||||||||
| Marketable equity securities | (.6) | .1 | (1.3) | .4 | ||||||||
| Other components of net periodic pension and OPEB cost | (2.2) | (.3) | (3.1) | (.6) | ||||||||
| Interest expense | (4.3) | (9.8) | (8.5) | (19.0) | ||||||||
| Income (loss) before income taxes | (12.3) | 28.0 | (34.4) | 39.6 | ||||||||
| Income tax expense (benefit) | (4.1) | 8.5 | (11.0) | 12.0 | ||||||||
| Net income (loss) | $ | (8.2) | $ | 19.5 | $ | (23.4) | $ | 27.6 | ||||
| Net income (loss) per basic and diluted share | $ | (.07) | $ | .17 | $ | (.20) | $ | .24 | ||||
| Weighted average shares used in the calculation of net income (loss) per share | 115.1 | 115.0 | 115.2 | 115.0 | ||||||||
| TiO2 data - metric tons in thousands: | ||||||||||||
| Sales volumes | 104 | 134 | 206 | 264 | ||||||||
| Production volumes | 89 | 137 | 194 | 258 | ||||||||
KRONOS WORLDWIDE, INC.
RECONCILIATION OF INCOME (LOSS) FROM
OPERATIONS TO SEGMENT PROFIT (LOSS)
(In millions)
| Three months ended | Six months ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| 2023 | 2024 | 2023 | 2024 | ||||||||||||
| (unaudited) | |||||||||||||||
| Income (loss) from operations | $ | (6.7) | $ | 35.9 | $ | (25.0) | $ | 55.4 | |||||||
| Adjustments: | |||||||||||||||
| Trade interest income | .4 | 1.5 | .7 | 1.9 | |||||||||||
| Corporate expense | 4.0 | 3.7 | 7.2 | 7.2 | |||||||||||
| Segment profit (loss) | $ | (2.3) | $ | 41.1 | $ | (17.1) | $ | 64.5 | |||||||
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA
(In millions)
| Three months ended | Six months ended | ||||||||||||
| June 30, | June 30, | ||||||||||||
| 2023 | 2024 | 2023 | 2024 | ||||||||||
| (unaudited) | |||||||||||||
| Net income (loss) | $ | (8.2) | $ | 19.5 | $ | (23.4) | $ | 27.6 | |||||
| Adjustments: | |||||||||||||
| Depreciation expense | 11.6 | 18.4 | 24.5 | 29.3 | |||||||||
| Interest expense | 4.3 | 9.8 | 8.5 | 19.0 | |||||||||
| Income tax expense (benefit) | (4.1) | 8.5 | (11.0) | 12.0 | |||||||||
| EBITDA | $ | 3.6 | $ | 56.2 | $ | (1.4) | $ | 87.9 | |||||
IMPACT OF PERCENTAGE CHANGE IN NET SALES
| Three months ended | Six months ended | ||||
| June 30, | June 30, | ||||
| 2024 vs. 2023 | 2024 vs. 2023 | ||||
| (unaudited) | |||||
| Percentage change in net sales: | |||||
| TiO2 sales volumes | 29 | % | 28 | % | |
| TiO2 product pricing | (8) | (9) | |||
| TiO2 product mix/other | (8) | (7) | |||
| Changes in currency exchange rates | - | 1 | |||
| Total | 13 | % | 13 | % | |
FAQ
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